Volume : VI, Issue : XII, December - 2017

IMPACT OF GST ON THE FINANCIAL SECTOR IN INDIA - A REVIEW

Dr. Repalle Giddaiah

Abstract :

Banks have always been a huge pillar of the Indian economy and taxpayers are literally banking on them for financial needs. At the stroke of June 30th midnight, India witnessed the introduction of GST at a special midnight ceremony in the Central hall of Parliament. Prime Minister Narendra Modi described the GST as a “Good and Simple Tax” that will be “not only a tax reform but an economic and social reform as well” that will unify the nation, “Check corruption and end harassment at hands of officers”. Goods & Service Tax (GST) was recommended in 1978 and could see the light on 1st July 2017. GST which would replace Eleven (11) indirect taxes in India has impact on all major business sectors. Banking industry would get impacted significantly. Obtaining separation registration in each State, identifying inter-state transactions, valuation, operational restructuring, reconciliation of statewide anches, filing of returns on monthly basis are some of the challenges. In this paper has been discussed various issues which could impact the banks.  

Banks would be having multiple anches spread across different states and the transactions would also be voluminous. GST levy is on supply concept which is very wide. Banks need to review all the income transactions to assess GST impact. All reports and returns are being automated in GST law. Therefore, compliance plays a key role in GST and it is expected that compliance would substantially increase for the banks due to the numbers. This paper lay down various issues that a Banking sector may face due to advent of GST and the suggestions so as to amend the rules, wherever required to be address the negative impact of GST on the Banking sector. Various aspects discussed herewith would apply to all types of banks viz., Nationalized Banks, Private Banks, Public Banks, Co-operative Banks etc. However, the article does not lay discussion on Non-Banking Financial Companies (NBFC’s), Micro Finance companies, Credit Cooperative societies etc.

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Article: Download PDF    DOI : https://www.doi.org/10.36106/gjra  

Cite This Article:

Dr. Repalle Giddaiah, IMPACT OF GST ON THE FINANCIAL SECTOR IN INDIA‾A REVIEW, GLOBAL JOURNAL FOR RESEARCH ANALYSIS : VOLUME-6, ISSUE-12, DECEMBER-2017


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